These are agencies that almost always downgrade bonds of states and national governments when the politicians cut taxes and reward them for raising taxes.

So now out of the blue, Fitch, has gained headlines by downgrading US Treasury securities to AA from AAA.

Why? First Fitch claims that there has been an “erosion of governance,” meaning too many debt limit standoffs and last-minute resolutions. That’s a stab at Republicans for insisting on a debt deal that would at least partially reduce the debt burden of the future. Why is this a bad thing?

Then they add:

Medium-term Fiscal Challenges Unaddressed: Over the next decade, higher interest rates and the rising debt stock will increase the interest service burden, while an aging population and rising healthcare costs will raise spending on the elderly absent fiscal policy reforms. The CBO projects that interest costs will double by 2033 to 3.6% of GDP.  The CBO projects that the Social Security fund will be depleted by 2033 and the Hospital Insurance Trust Fund (used to pay for benefits under Medicare Part A) will be depleted by 2035 under current laws, posing additional challenges for the fiscal trajectory unless timely corrective measures are implemented.

These are all truisms, but Fitch is just discovering this NOW?? Where have they been for the last 20 years?

There is no one who has been more critical than we have at CTUP for the financial recklessness of Biden – who has spent $6 trillion over the baseline in the last three years.

But the idea that the United States government will default on its debt is even less likely than Joe Biden winning the Boston Marathon.

If US Treasuries are downgraded to AA then what, pray tell, is a AAA security? A Eurobond?

If US Treasury securities are so risky, then why is it that when a crisis hits everyone in the world rushes to buy them? There’s a reason US Treasuries are the first flight to safety. The full faith and credit of the United States government stands behind our bonds. Period.